• US Dollar Index fails to preserve daily gains.
• FOMC is expected to reaffirm its neutral stance.

The NZD/USD pair slumped to a daily low of 0.6850 earlier in the day but was able to recover the majority of its daily losses in the second half of the day. As of writing, the pair was down 0.07% on a daily basis at 0.6876.

Before the FOMC publishes the minutes of its January 29-30 meeting later in the session, the greenback started to lose strength in the last hour and allowed the pair to reverse its course. Although there were no fundamental drivers that may have triggered a USD sell-off, the sharp upsurge witnessed in the GBP/USD pair amid Brexit optimism pulled investors away from the greenback.

“Minutes from the January FOMC meeting will be published at 14:00 ET. Given the range of speakers since the January meeting who support "patience," the Fed minutes should reiterate a dovish message overall — but could risk highlighting some disagreements on the FOMC,” TD Securities analysts said in a recently published report.

• FOMC Minutes Preview: Major Banks expecting a reiteration of a dovish message.

In the early Asian session on Thursday, employment data from Australia will also be looked watched closely by the participants as a sharp reaction in the AUD/USD pair could impact the kiwi's price action.

Key technical levels